In many families, one spouse may take the lead in managing legal and financial matters, which leaves the other spouse at a disadvantage if something happens to the one in control of the money. Similarly, when a single person dies or becomes incapacitated without discussing these issues with anyone, it makes it harder for family members to handle his/her affairs. Taking the time to put together a financial and legal inventory can save loved ones a great deal of time, money and stress. Here is some of the key information you should compile:
- Legal and tax documents. Family members should have a list of their important documents and where they are kept (e.g., safe deposit box, fire-safe box in the home, with an attorney, etc.). These include original wills, trusts, powers of attorney, health care proxies, real estate deeds, title to vehicles, income tax returns, insurance policies, birth/marriage certificates, Social Security cards, etc.
- Financial accounts. Bank, retirement, brokerage and other accounts should be documented with account numbers, institutions, and balances/statements.
- Passwords. In addition to passwords for financial accounts, family members should prepare a list of other online passwords such as for computers, laptops, tablets and cell phones; domain names; websites; home/business security codes and anything else that might be necessary or desirable to access. Remember to include accounts that may have sentimental as well as financial value, such as personal social media and email accounts and online libraries of content (books, movies, music, photos, etc.).
- Contact information for trusted advisors. It is helpful to prepare a list with your attorney, accountant, financial advisor, bankers and/or insurance brokers. Ideally, a loved one should be introduced to advisors in advance even if it’s by phone or email, so they can feel more comfortable with that person in the event of your incapacity or death.
- Business-related documents and contacts. If anyone owns a business, outline the key contacts and information that your loved one will need to deal with immediately. This may include reaching out to business partners, key employees, vendors, trusted advisors and others. In addition, you should have a separate list for your business of where to find legal, tax documents, financial accounts and passwords.
Once you organize this information, you must tell someone where they can find these lists. You may want to consider storing password information and documents on a thumb drive or keeping it in an otherwise secure but accessible location.
It’s crucial to share information with the people who will be left behind to deal with your affairs to spare them anxiety as well as ensure your assets and documents are easily found. If you are a family member who has not been involved in financial and legal matters, now is the time to have those discussions.
Many people avoid taking these steps because it’s stressful to think about death or incapacity, but it should be done for the sake of your loved ones who don’t need an extra burden when you are gone. If you need assistance with your estate planning, contact me for a consultation.